I suspect that children are becomming better in ways that we can measure in an IQ test ... Many videogames build logical problem solving skills, and help to develop pattern recognition but this may come at the expense of many social skills if children are exposed to videogames in excess.
I don't want to offend anyone, but something I have noticed through university and in the workplace is people who were home-schooled as children often turn out to be very strange adults; even children who were only home-schooled in primary school seem to lack many of the social skills most of us take for granted. I suspect that if a child was playing videogames at the expense of interaction with their peers it would result in very similar developmental problems.
